- The British pound has shown itself to be somewhat negative against the Swiss Franc during the session here on Wednesday as we have dropped rather precipitously, but we are trying to turn things around and show signs of life.
- The market, of course, is something that you need to pay close attention to as far as risk profile is concerned, because that will be a major factor going forward.
- The 1.11 level is an area that a lot of people pay attention to as not only is it a large round psychologically significant figure, but it’s also where the 50 day EMA presently sits.
Underneath, I would anticipate that the 1.10 level will be significant support, and I think that support is something worth watching because if we can stay above there, there’s still a chance that we will rally longer term. Anything below the 1.10 level would be rather negative, and therefore, I think we’re kind of in an area that is significant, and it is worth watching very closely. This is an area that will continue to make waves for traders.
Ultimately, I do think that we recover sooner or later unless we get some type of geopolitical issue or like global issue that just absolutely crushes the idea of taking risk. The Swiss franc being the safety currency of the two, obviously it has a specific purpose, and it is worth noting that over the longer term, we may have just formed something akin to a triple bottom, but we’ll just have to wait and see. On a move above the 200 day EMA, which is just above 1.12, we could see this market go all the way to the 1.14 level. Anything above there will really get this market moving. However, keep in mind that we need to see more “risk appetite” reenter the psyche of traders.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.